Running an online lottery in the UK is subject to specific regulations under the Gambling Act 2005 and the Gambling Commission's guidance. Here are the key rules and requirements:

1. Licensing Requirements

  • Operating License: You must obtain a lottery license from the UK Gambling Commission if you are operating a lottery, except in cases of exempt lotteries (see below).
  • Personal Management License (PML): Key management personnel may need a PML depending on the scale of operations.
  • Licenses are subject to a fee and must be renewed periodically.

2. Types of Lotteries

The Gambling Act 2005 categorizes lotteries into regulated lotteries and exempt lotteries:

Regulated Lotteries

These require a license:

  • Large Society Lotteries: Run to support non-commercial or charitable purposes, with ticket sales exceeding £20,000 in a single draw or £250,000 annually.
  • Local Authority Lotteries: Organized by local councils.

Exempt Lotteries

These do not require a license but must follow specific rules:

  • Small Society Lotteries: Must register with a local authority if ticket sales are below £20,000 per draw or £250,000 annually.
  • Private Lotteries: Operated within a private group, such as members of a club.
  • Incidental Lotteries: Held during an event, e.g., a raffle at a charity event.
  • Customer Lotteries: Run by businesses for customers only (e.g., prize draws).

3. Key Operating Rules

  • Proceeds Use: For society lotteries, at least 20% of proceeds must go to charitable or non-commercial purposes.
  • Ticket Prices: Lottery tickets must be sold for a fixed price (no discounts or bulk purchases).
  • Age Restrictions: Participants must be 18 or older to purchase lottery tickets.
  • Promotions: Clear terms and conditions must be provided, including how to enter, the price, and the odds of winning.
  • Advertising: Must comply with UK advertising standards and not target vulnerable groups (e.g., minors).
  • Returns Submission: Licensed operators must submit regular financial returns to the Gambling Commission.

4. Prohibited Practices

  • Profit-Making: Lotteries cannot be run for commercial profit unless authorized under the Gambling Act.
  • Unfair Terms: All lotteries must be transparent, and terms must not mislead participants.
  • Illegal Participation: Participation must be limited to eligible persons and geographic areas (e.g., within the UK).

5. Data Protection and Security

  • Operators must comply with UK GDPR regulations to protect participants’ data.
  • Systems for ticket sales, random draws, and prize distribution must be secure and auditable.

6. Remote (Online) Lotteries

  • You must obtain a Remote Gambling License from the Gambling Commission for operating an online lottery.
  • Ensure that the platform complies with UK regulations on responsible gambling, such as:
    • Offering self-exclusion tools.
    • Displaying clear terms for participation.
    • Providing links to support services (e.g., GamCare).

Penalties for Non-Compliance

  • Running an illegal lottery can result in fines, license revocation, or criminal prosecution, including imprisonment for up to 51 weeks.

Additional Resources

  • Visit the UK Gambling Commission for detailed guidance and to apply for licenses.
  • Consult a solicitor specializing in gambling law to ensure full compliance.